This rule which is currently in force certainly harms business succession. In Quebec, 32% of SME owners got their start by buying an existing business, compared to 25% for Canada overall. Twenty-three per cent of current business owners in Quebec are intending to sell their business over the next few years, and a third of those wish to sell to a member of their own family. Many businesses don't agree with the rule. Business succession presents a huge advantage. Obviously, you don't have to start up a business dealing with unknowns. Everything is all set up with an existing business. The buyer can count on historical sales, financial forecasts, and in some cases, a client base which is extremely well established. The buyer knows what he or she will earn from the get-go. There are therefore many advantages to business succession, and the federal government should help by ending this unfair policy which unduly penalizes the direct transfer of a business to a member of one's family rather than to a third party. We reckon that if we eliminate this of rule, we can boost the entrepreneurial index, which has been rather lacklustre these past few years.
The Government of Quebec has made changes on its side to negate the unfair effect. But in order to correct the problem fully, the federal government also has to do its part.